Vodafone Idea shares rallied sharply on Monday, surging over 9% to ₹10.53 apiece, after the Supreme Court provided significant relief to the debt-laden telecom operator. The apex court permitted the Central government to reconsider the issue of adjusted gross revenue (AGR) dues, potentially paving the way for long-awaited relief to the company. The Supreme Court, while delivering its order, emphasized that the decision applies only under the “peculiar facts and circumstances” of this case, noting Vodafone Idea’s substantial equity stake and its over 20 crore subscribers. The bench stated that it sees “no reason why the Centre should be prevented from reconsidering the issue.”
While the Central government, represented by Solicitor General Tushar Mehta, has yet to submit a formal resolution on the matter, the court’s remarks effectively give it the green light to explore possible relief measures for the telecom operator. The stock, which had witnessed volatility ahead of the AGR dues hearing, rebounded sharply after the announcement, regaining investor confidence. Vodafone Idea shares have now sustained above the ₹10 mark, signaling renewed optimism over potential government intervention. The stock has risen 17.5% in the last one month and is close to its FPO price of ₹11 per share.
Earlier this month, news agency Bloomberg reported, citing sources that the Centre is weighing on a resolution for Vodafone Idea dues to bolster its ties with the UK. The Centre is considering a one-time settlement, it reported. The resolution could be a waiter of interest and penalties, which would be followed by a concession on the principal, Bloomberg reported, adding that the Centre officials were drafting the framework. A total of ₹2,774 crore of the ₹9,450 crore comprises the FY18-19 dues of the merged Vodafone Idea and Idea group entity and their consolidation in August 2019. A total of ₹5,675 crore is with regards to the pre-merger Vodafone Group.